The Four Hundred

IBM, a company that struggles to stand out in the small and midsized business (SMB) market, is about to step out and "Express" itself. Big Blue last week launched a new family of so-called Express software products that would benefit SMBs that think IBM is too pricey compared with alternative middleware and database solutions. The first round of Express products is aimed at Unix, Windows, and Linux platforms. But don't despair, iSeries fans. Your Express software is on the way.

IBM plans to get the Express edition of its WebSphere Application Server, which is just a taste of what it hopes to cook up with Express products, out the door in mid-December. The current WebSphere Portal for iSeries has not been successful in the SMB space because its high per-processor charges and the complexity of installing and using WebSphere are too much for these customers to bear. WebSphere Application Server Express for iSeries will support only OS/400 V5R2. Thirty days later, IBM says, WebSphere Express will be available on OS/400 V5R1.

WebSphere Express is a starting point, but it is just one piece of the WebSphere Express product line. The other announced WebSphere Express products--WebSphere Portal Express and WebSphere Business Connection Express--will be ready for introduction early in 2003, but those solutions, for the time being, will be exclusively on Microsoft Windows and Linux servers.

IBM says it is rolling out the Wintel-based WebSphere Express products ahead of the iSeries versions because 65 to 70 percent of the SMB market is Windows-based. However, the expectations are that all Express products will eventually be available on all popular platforms.

Pricing for WebSphere Express will be set at $25 per user, $2,000 per processor, for unlimited users on intranet, Internet, or extranet Web sites, and $400 for additional copies for developer use only. WebSphere Portal Express will be available at $77 per intranet user or $30,000 per processor for an unlimited number of users in an extranet environment. WebSphere Portal Server Express Plus, which has extra features, will be available at $122 per intranet user or $47,820 per processor for an unlimited number of users in an extranet environment. WebSphere Business Connection Express, an entry-level edition of IBM WebSphere Business Connection software, for B2B process integration and data sharing, will be available at $5,000 per processor. It includes the capability to connect to 10 trading partners in that price.

In addition to the WebSphere Express middleware, IBM is creating a DB2 Express database, which will ship Windows, Linux, and Unix servers in the first quarter of 2003. DB2 Express, a low-cost version of DB2 that aims to compete against Microsoft's SQL Server and Oracle's Oracle9i databases on Windows and Linux servers, would nonetheless be interesting on an iSeries that unbundled the OS/400 operating system and DB2/400 database from the hardware. As it stands, customers pay the same tiered pricing on specific AS/400 and iSeries machines for OS/400 and DB2, whether they have five users or 500 users on a particular machine. The upshot is that customers with relatively few users in any given OS/400 software tier end up paying big bucks per seat. As we have been explaining in the iDeal iSeries articles that have been running in The Four Hundred for the past several weeks, we favor a move to a different pricing model that eliminates OS/400 software tiers and charges customers a mix of user-based and CPU-based prices for OS/400, DB2/400, and application connectivity, so OS/400 shops only pay for what they use and so iSeries software pricing more accurately reflects the kind of pricing embodied in the new Express pricing.

IBM says that DB2 Express will incorporate autonomic capabilities, such as a remote database administrator, to reduce the management complexity in maintaining an enterprise-class database. It will enable ISVs and partners to offer preconfigured solutions for midsized customers. DB2 Express prices will start at $1,000. The exact metrics of that price were not divulged, and neither was how pricing will scale up as companies add processors or users to their servers.

These are the first of what IBM says will be a long line of Express products that will be developed with the goal of creating enterprise-ready middleware at an affordable prices. According to sources at IBM, Express product pricing on the iSeries will be identical to the pricing offered on Unix and Windows products. OS/400 shops have, in the past, had to pay a premium for software that often came out later than Unix and Windows versions. ISVs and business partners will provide the impetus for moving the Express products into the iSeries SMB market. Sources at IBM say the same products for the iSeries will be available as soon as the second quarter of 2003.

Expectations are that the Express family will, in the future, include products for content management, business intelligence, and e-commerce. It is likely that Express versions of Lotus products are on the horizon as well. We haven't heard about DB2 Express for the iSeries, but we think that you should start lobbying IBM for it.

As IBM makes a stronger play for SMB customers with the Express family of products, a top priority is to provide solutions and product capabilities to customers who do not have expertise with these complex products. Big enterprises and sophisticated midrange shops have such talent, but SMBs do not. Ease of use and installation are just as important, in the long run, to SMBs as a low price. But IBM can't even get its foot in the door, against Microsoft and Oracle, without a low price to start. Hence, the Express launch.